The Electoral Commission, Britain's elections watchdog, has concluded that government plans to curb political campaigning by charities before a general election are flawed and in part unworkable.

In a private briefing sent to interested parties, the commission says that it has "significant concerns" about the coalition's lobbying bill, that some parts of it may be unenforceable and that it is not at all clear how the new restrictions affecting charities will work.

The strength of the commission's criticisms will embolden campaigners hoping for a government U-turn, although the speed with which the government is planning to push the bill through the Commons has raised fears that ministers are not in the mood for compromise.

When the transparency of lobbying, non-party campaigning and trade union administration bill 2013-14 was published in July, the day before MPs broke up for their summer recess, it emerged that, as well as long-expected plans for a statutory register of lobbyists, the bill includes proposals that would drastically curtail the ability of charities and other groups to campaign on political issues in the 12 months before a general election.

Under the current rules third-party groups such as charities can spend up to £989,000 during this period on material, such as leaflets, that could affect the outcome of the election.

The bill not only slashes this limit to £390,000, but also broadens the definition of what counts as spending – to include overheads and staff costs – and widens the definition of what counts as election-related activity to include work that could affect the outcome, even if that was not its purpose.

The bill limits spending per constituency to £9,750, and lowers to £5,000 the amount charities can spend before they have to register with the Electoral Commission.

In its letter, the commission says the proposed rules about spending at constituency level "may be unenforceable", partly because "it will often be hard for campaigners to identify with a reasonable level of confidence when an activity has 'no significant effects' in a given constituency".

More broadly, it says the proposed rules about what constitutes election-related activity are not sufficiently clear.

The briefing says: "In our view, it is not at all clear how that test will apply in practice to the activities of the many third parties that have other purposes beyond political campaigning. For instance, it seems arguable that the new test could apply to many of the activities of charities, voluntary organisations, blogs, thinktanks and other organisations that engage in debate on public policy.

"In contrast, the current definition of third party campaigning sets out quite clearly both the type of activity that may be covered (material directed at the public that promotes electoral success), and the fact that such activity is controlled whatever the intentions of those carrying it out."

John Sauven, executive director at Greenpeace, one of more than 100 charity organisations that have expressed concerns about the bill, said the legislation was "the most pernicious assault on campaign groups in living memory".

Angela Eagle, the shadow leader of the Commons, said: "This bill amounts to a sinister gag on charities and campaigners in the year before the election. The government urgently needs to listen to charities and campaigners who are telling them that these proposals will have a chilling effect on the quality of our national debate."

A spokesman for the Electoral Commission said it had "significant concerns" about the bill and would be explaining them in detail to a select committee in September. The bill's second reading is on 3 September, with its three-day committee stage a week later.

The Cabinet Office said the bill was designed to give "greater transparency where third parties campaign in a way which supports a particular political party or its candidates".

The government would "work constructively with the Electoral Commission and other parties" to achieve those objectives, a spokeswoman added.